[The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% $ 36,000 99,000 22% 63,000 14% 8% Chicago $ 150,000 45,000 105,000 70% 78,000 $ 27,000 100% 30% Minneapol $ 300,000 180,000 120,000 52% 48,000 18% $ 72,000 Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no mange in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 1234 should be entered as 12 311
[The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% $ 36,000 99,000 22% 63,000 14% 8% Chicago $ 150,000 45,000 105,000 70% 78,000 $ 27,000 100% 30% Minneapol $ 300,000 180,000 120,000 52% 48,000 18% $ 72,000 Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no mange in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 1234 should be entered as 12 311
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental
clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs
of consulting jobs as variable costs. A contribution format segmented income statement for the company's
most recent year is given:
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses not traceable to offices
Net operating income
Office
Total Company
$ 450,000
Chicago
Minneapol
$ 36,000
100%
225,000 50%
225,000 50%
126,000 28%
99,000 22%
63,000 14%
8%
$ 150,000
100% $ 300,000
45,000 30%
180,000
105,000 70%
120,000
78,000 52%
48,000
$27,000
18%
$ 72,000
3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no
change in fixed costs.
a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e.
0.1234 should be entered as 12.3).)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0098864d-7688-4ffb-9a03-ab272e8301b6%2Fec661d3c-f543-42c6-9420-f3dd177a988d%2Fh5idws_processed.png&w=3840&q=75)
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Required information
[The following information applies to the questions displayed below.]
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental
clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs
of consulting jobs as variable costs. A contribution format segmented income statement for the company's
most recent year is given:
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses not traceable to offices
Net operating income
Office
Total Company
$ 450,000
Chicago
Minneapol
$ 36,000
100%
225,000 50%
225,000 50%
126,000 28%
99,000 22%
63,000 14%
8%
$ 150,000
100% $ 300,000
45,000 30%
180,000
105,000 70%
120,000
78,000 52%
48,000
$27,000
18%
$ 72,000
3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no
change in fixed costs.
a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e.
0.1234 should be entered as 12.3).)
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